The Irish construction sector has warned that surging oil prices could “further accelerate cost increases,” raising concerns about project viability and supply chain pressures across the industry.
The Construction Industry Federation (CIF) released its first-quarter 2026 Outlook Survey, highlighting ongoing inflationary pressures. The survey, conducted between 30 January and 24 February among 200 construction companies, found that 79% of respondents reported a year-on-year increase in raw material costs in the fourth quarter of 2025. A similar 77% expect costs to continue rising during the first three months of this year.
CIF chief executive Andrew Brownlee said the outbreak of war in Iran on 28 February has heightened “renewed concern across the Irish construction industry about the volatility” impacting global markets. He emphasized that fuel costs are a core driver of expenses in the sector, underpinning the manufacture and transport of construction materials.
“As a small island economy, transportation and logistics form a major component of our material costs, so shocks of this magnitude have an outsized impact on construction project viability,” Brownlee said. He added that the “scale and speed of the oil price spikes since the outbreak of war are deeply alarming for the industry,” noting the potential effects on project delivery, contract management, and the pipeline of work.
The survey also highlighted the industry’s cautious stance toward public projects. Engagement with Public Works Contracts remains limited, with 73% of companies reporting low involvement in the fourth quarter of last year and 71% expecting similarly low participation in the first quarter of 2026. The CIF attributed this to administrative hurdles, bureaucracy, and low margins on public contracts.
Despite these challenges, 19% of companies expect their involvement in Public Works Contracts to increase over the next 12 months. Brownlee pointed to initiatives such as the Delivering Homes, Building Communities 2025–2030 plan and the Action Plan on Accelerating Infrastructure, which demonstrate strong state intent, but he argued that structural barriers continue to limit delivery. “The primary constraints are not labour or skills, but planning delays, legal challenges, and infrastructure deficits,” he said.
The CIF is calling for clearer project pipelines tied to the €102.4 billion National Development Plan (NDP) allocation for 2026–2030 to maintain business certainty and prevent firms from shifting focus to international markets. Brownlee said careful cost management and ongoing monitoring of supply chain pressures will be essential in navigating these price shocks.
The survey also noted employment growth in the fourth quarter, particularly among large-scale firms, with expectations of broad-based growth continuing into the first quarter of 2026. The CIF remains focused on driving competitiveness and productivity to ensure that record investment translates into completed projects.
